Correlation Between Eguana Technologies and Tantalus Systems

Can any of the company-specific risk be diversified away by investing in both Eguana Technologies and Tantalus Systems at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eguana Technologies and Tantalus Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eguana Technologies and Tantalus Systems Holding, you can compare the effects of market volatilities on Eguana Technologies and Tantalus Systems and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Eguana Technologies with a short position of Tantalus Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eguana Technologies and Tantalus Systems.

Diversification Opportunities for Eguana Technologies and Tantalus Systems

0.27

Correlation Coefficient

Eguana Technologies  Tantalus Systems

Modest diversification

The 3 months correlation between Eguana and Tantalus is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eguana Technologies and Tantalus Systems Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tantalus Systems Holding and Eguana Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Eguana Technologies are associated (or correlated) with Tantalus Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tantalus Systems Holding has no effect on the direction of Eguana Technologies i.e., Eguana Technologies and Tantalus Systems go up and down completely randomly.

Pair Corralation between Eguana Technologies and Tantalus Systems

Assuming the 90 days horizon Eguana Technologies is expected to generate 8.34 times more return on investment than Tantalus Systems. However, Eguana Technologies is 8.34 times more volatile than Tantalus Systems Holding. It trades about 0.09 of its potential returns per unit of risk. Tantalus Systems Holding is currently generating about 0.02 per unit of risk. If you would invest  1.00  in Eguana Technologies on December 30, 2024 and sell it today you would lose (0.15) from holding Eguana Technologies or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Eguana Technologies  vs.  Tantalus Systems Holding

Eguana Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eguana Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Eguana Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Tantalus Systems Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tantalus Systems Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Tantalus Systems is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eguana Technologies and Tantalus Systems

The main advantage of trading using opposite Eguana Technologies and Tantalus Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eguana Technologies position performs unexpectedly, Tantalus Systems can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tantalus Systems will offset losses from the drop in Tantalus Systems' long position.

The idea behind Eguana Technologies and Tantalus Systems Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.